Weekend press round-up: PM urged to fulfil household insulation pledge

In our latest review of sector coverage across the national newspapers, Boris Johnson is under pressure to ignore his chief advisor’s scepticism about a mass home insulation drive. Meanwhile, there are reports that Ofgem is to back track on changes to the gas transmission charging regime in the face of pressure from heavy industrial users.

Boris Johnson is urged to fulfil £9bn UK household insulation pledge

Boris Johnson has been urged to fulfil his manifesto promise to spend £9bn on a huge household insulation programme as his chief adviser tries to shift the spending on to other priorities.

The UK prime minister delighted green groups in November when he committed the Conservative party to “invest £9.2bn in the energy efficiency of homes, schools and hospitals”.

But the policy has been snarled up in a Whitehall turf war after Downing Street chief adviser Dominic Cummings sought to water down the policy.

Mr Cummings has privately argued that the cash should be spent on building homes instead — with insulation a priority for later on.

Now the House of Commons’ environmental audit committee is launching an inquiry into home insulation, warning that without any immediate action the UK will miss its target to meet net-zero carbon emissions by 2050.

Philip Dunne, the Tory MP who chairs the EAC committee, urged Mr Johnson to proceed with the policy to address the “vast” scale of the challenge ahead. “The government made a powerful commitment in its manifesto to invest £9.2bn to improve energy efficiency of social housing and public buildings but has yet to bring forward policies to deliver this,” he said.

Mr Johnson’s commitment in November included £6.3bn to insulate 2.2m disadvantaged homes, cutting their energy bills by as much as £750 a year.

That would include a £3.8bn Social Housing Decarbonisation Scheme and a £2.5bn Home Upgrade Grant to replace boilers and provide insulation for 200,000 existing homes.

However, when chancellor Rishi Sunak unveiled his Budget in March there was only a vague commitment to “reducing emissions from homes” — and no mention of the original £9.2bn manifesto pledge.

Instead, there was only £100m allocated towards heat pumps and biomass boilers through a “Low Carbon Heat Support Scheme” from April 2022 — replacing the existing Renewable Heat Incentive (RHI).

There is still enthusiasm for the scheme in the Treasury and Beis, the business department, but several Whitehall figures have blamed Mr Cummings for the deadlock.

One said the Number 10 adviser saw the project as “boring old housing insulation” while another said he was sceptical about the 2050 net-zero target.

Another said Mr Cummings believed new housing was a bigger priority and should take the lion’s share of the £9bn capital spending.

The Financial Times

Ofgem set to backtrack on £60m bill for big gas users

Energy watchdog Ofgem is set to back down on plans to scrap cheap gas tariffs threatening to add at least £60m to the bills of UK industry giants from October.

Heavy gas users in Teesside such as Ineos and BOC have benefited from cheaper transmission charges for more than 20 years, because they are close to terminals where the gas is piped ashore.

Ofgem had planned to scrap the so-called “short-haul tariff” from October to comply with European Union regulations, which some firms have said could lead to a 25-fold rise in gas transmission charges.

But the regulator is now set to hold fresh talks with the industry next week amid signs of a shift at the top.

Andrew Large, chairman of the Energy Intensive Users’ Group (EIUG), said: “We’ve been given to understand by Ofgem at a pretty senior level that they share our objective of having a short-haul product in place so there is no gap from October onwards.

“I believe they genuinely see there is an issue and they are trying to resolve it.”

Nick Wye, of consultant Waters Wye, said the affected industries – supporting more than 30,000 Teesside jobs – faced a “minimum of £60m” in extra costs after National Grid published new charging plans for after October.

An Ofgem spokesman said: “Throughout this process we have held ongoing discussions with those affected by the changes, including the short-haul discount.

“We have said that if industry brings forward modifications aimed at avoiding inefficient duplication of the gas network that could increase costs overall then we will consider them as per the usual process.”

Sunday Telegraph

Just 6% of UK public ‘want a return to pre-pandemic economy’

Only 6% of the public want to return to the same type of economy as before the coronavirus pandemic, according to new polling, as trade unions, business groups and religious and civic leaders unite in calling for a fairer financial recovery.

The former head of the civil service Bob Kerslake, the former archbishop of Canterbury Rowan Williams, the heads of the Trades Union Congress, Confederation of British Industry and the British Chambers of Commerce are among 350 influential figures wanting a “fairer and greener” economic rebuilding, and believe there is no going back to the past.

Their call comes as a YouGov poll shows that 31% of people want to see big changes in the way the economy is run coming out of the crisis, with a further 28% wanting to see moderate changes and only 6% of people wanting to see no changes.

It also showed 44% of people were pessimistic when they thought about the future of the economy, while only 27% were optimistic. Forty-nine percent thought the crisis had made inequality worse.

Labour peer Lord Kerslake said: “As the country begins to emerge from the crisis, it is becoming clear that people want a better future, not simply to return to where we were before. As with big crises in the past – from wars to the Great Depression – it was universally agreed that there was no going back.

“And so we have to ask deep questions about what kind of society and economy we now want to build. The moment we are in is a challenge to us all: to governments, businesses, civil society and citizens. But it is a challenge to which, together, we can rise and build something better.”

The research, commissioned by the New Economics Foundation, was released at the launch of their “Build Back Better” campaign. Other signatories include David Walker, the bishop of Manchester, Rose Hudson-Wilkin, the bishop of Dover, senior rabbi Laura Janner-Klausner, and the heads of Oxfam, Shelter, Save the Children, the Trussell Trust, Greenpeace and Friends of the Earth. Frances Morris, director of the Tate Modern, has also signed up in a personal capacity.

The campaign is calling for an economic recovery that provides more funding for the NHS and social care, tackles inequality, creates good jobs, particularly for young people, and reduces the risk of future pandemics and climate emergencies.

Miatta Fahnbulleh, chief executive of the New Economics Foundation, said: “The crisis has revealed a number of harsh truths – that our health and social care services had been under-resourced, and that longstanding inequalities have left too many people vulnerable. But we have seen what can be achieved when we are faced with a crisis – government can spend wisely, at speed and at scale.”

It comes as the Labour party leader, Keir Starmer, directly challenged the prime minister on his pledge to spend billions on the country’s economic recovery, considering the scale of “inaction and broken promises” in the last 10 years of Conservative power.

Starmer pointed out a raft of existing regional inequalities in spending per head for education and health in light of Johnson’s promise to “level up” the economy.

Speaking ahead of the prime minister’s planned speech on the economic recovery on Tuesday, Starmer said: “For much of the country, the Tories’ record on building and investment has been a lost decade.

“Much hyped plans such as the starter homes initiative – which built zero houses despite having £2.3bn allocated to it – barely made it beyond the press release. It’s been talk, talk, talk rather than build, build, build.

“Our recovery from the coronavirus crisis needs to match the scale of the challenge. It must be built on solid foundations. It has to work for the whole country and end the deep injustices across the country.”

The Guardian

Broadband boost needed for UK to go green

Billions of pounds allocated for roads should be redirected to upgrading broadband coverage across the country and other measures to promote a greener economy, a think tank says.

The Green Alliance says the UK cannot afford to expand its roads if it is to hit its target to be carbon neutral by 2050. Rishi Sunak, the chancellor, said in March that £27 billion would be spent over five years on upgrading 4,000 miles of road, improving 100 junctions and better links to 20 ports and airports.

The alliance said: “Even with the 2035 phase-out date for petrol and diesel cars, we can’t shift to electric fast enough to meet our carbon budgets: we can’t afford further road expansion.”

It also called for projects to make it easier and safer to walk or cycle and investment in electric car chargers.

A separate study has found that 2.2 million jobs are at risk from the shift to a low-carbon economy unless workers acquire new skills.

Miners, oil and gas industry workers, car mechanics, plumbers and City traders are among those who will have to retrain as industries are transformed by the legally binding target of being carbon neutral by 2050, research says.

A coalition of 24 mayors and council leaders is calling on the government to commit itself to investing in helping workers gain “green skills”. The UK 100 Resilient Recovery Task Force, includes mayors and leaders nationwide.

Gas engineers must retrain to fit heat pumps, welders in the oil industry could build wind farms and City traders could be “carbon traders”. The figures were compiled by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

The Times

Hydrogen fuel bubbles up the agenda as investments rocket

More than 50 years ago hydrogen fuel cells helped put Neil Armstrong on the moon, but mainstream usage of the technology has remained elusive since.

Now there are signs that may be changing, with a spate of new investments even amid the coronavirus pandemic.

In the UK, the transport secretary, Grant Shapps, this week told MPs that the government will experiment with hydrogen fuel cells for an entire town’s bus network. Earlier this month, the Department for Transport gave £400,000 to the Hydroflex project, run by the University of Birmingham and rail-leasing company Porterbrook, to bring the first hydrogen train to UK main lines in the next few weeks.

Carmakers have recognised the potential of the technology for decades. Detroit’s General Motors first tested its hydrogen-powered Electrovan in 1966, but in the UK only 169 hydrogen cars have ever been registered. Elon Musk, the chief executive of Tesla, regularly describes “fool cells” as “staggeringly dumb” for passenger cars, given the inefficiencies of using electricity to produce hydrogen rather than directly to power vehicles.

Yet many large automotive manufacturers are sticking with it. Toyota, the world’s second-largest carmaker, planned – before the pandemic – to produce 30,000 of its Mirai hydrogen cars in 2020, but larger vehicles are the main aim, said Johan van Zyl, chief executive of Toyota Motor Europe, earlier this year.

“We need scale for hydrogen to be successful,” he said. “To find scale I think heavy commercial vehicles and buses will be the first phase of hydrogen application in Europe.”

Hydrogen has already been used successfully in large vehicles. Transport for London’s RV1 bus route shadowing the Thames used hydrogen buses for eight years, which clocked up more than 1m miles. Buses run on regular routes and return to depots, removing the biggest obstacle to mass adoption of hydrogen: the lack of a network of filling stations across the UK.

The logic of using hydrogen for buses prompted Jo Bamford, the heir to the JCB digger empire, to buy Wrightbus out of administration in October. The Northern Irish busmaker is working with Bamford’s hydrogen production company, Ryse, on a plan to popularise hydrogen buses. Ryse has a contract with TfL to supply hydrogen for 20 new double-deckers, ordered from Wrightbus last year.

Bamford, whose father is Lord Bamford, the billionaire Tory donor, lobbied for the government to support a hydrogen bus experiment.

Bamford estimated that Wrightbus would be able to produce buses at the same cost as diesel at a rate of about 600 buses a year. He expected the firm to be profitable in 2020 before the pandemic struck, and acknowledged that he had spent “millions” of pounds keeping the company afloat after it was forced to stop production.

Part of Bamford’s pitch was that the UK could be a world leader in hydrogen, if it invests in infrastructure soon. “We missed the boat on batteries in Britain,” he said. “This is a great British solution.”

For rail and vehicle usage – and potentially aircraft – fuel cells have the major benefit of allowing refuelling within minutes, compared with the hours of charging required by some battery-powered cars.

The flurry of activity has piqued investor interest. Sheffield-based ITM Power has what it claims is the world’s largest factory making electrolysers, the machines that break down water into its hydrogen and oxygen constituents. Shares in the Aim-listed company, backed by chemicals giant Linde, have more than tripled in price since the start of the year.

Graham Cooley, ITM’s chief executive, says the revolutionary reduction in renewable energy costs has made hydrogen into a genuine solution across the economy. Solar- and wind-powered electrolysis offers the prospect of carbon-neutral hydrogen production, which could also provide an effective way of storing unpredictable renewable energy.

“The market for green hydrogen is expanding exponentially,” said Cooley. “The whole world is moving to net zero.”

The Observer

Keir Starmer could drop Labour’s 2030 net zero climate target

Labour could drop the ambitious 2030 climate crisis target it adopted under Jeremy Corbyn, the party’s new leadership has said.

A spokesperson for Keir Starmer said that he had supported the plans included in Labour’s last manifesto, but that the party had lost the election.

The Green New Deal policy adopted under the previous leadership included the aim of a path to net zero carbon by the year 2030, based largely on massive public investment in green technology.

The suggestion that the commitment could be dropped has prompted an outcry from MPs on the left of the party and concern among activists.

24 MPs from the left of the party, including Jeremy Corbyn, John McDonnell, and Diane Abbott, have written a letter endorsing the proposal, arguing that it amounts to “necessary and urgent action”.

They call on the party to remain committed to the 2030 target, a ban on fracking, public ownership of the energy sector, and other measures like welcoming climate refugees and green public transport.

Keir Starmer’s spokesperson said: “The last manifesto made a number of really important commitments on this, which Keir supported, but we lost the election and Labour lost five years in government to tackle climate change.

“The next manifesto, the next target, will be written in four or five years’ time and we’ll have to deal with the circumstances we are in then.”

The Independent

National Grid’s blackout boss John Pettigrew lands £5m payday

The National Grid boss who presided over last year’s blackouts has reaped £5.3m.

John Pettigrew’s £1m salary was swollen by £3.9m in share bonuses, which he must hold for at least two years. His package increased from £4.7m a year earlier.

Pettigrew, 51, who joined National Grid in 1991, was thrust into a storm last August when the simultaneous failure of a wind farm and gas-fired power plant caused mass blackouts. It left passengers stranded on trains and caused part of Ipswich hospital to lose power.

The energy watchdog fined three firms a total of £10.5m in January for the blackouts, although National Grid was not one of those sanctioned.

Luke Hildyard of the High Pay Centre said it was “unseemly” that “someone should be paid £5.3m for running what is essentially a public service”.

Sunday Times

Hydro plants first line of defence in battle to keep Britain’s lights on

In the Welsh and Scottish mountains, a small number of hydro power stations, some of them more than half a century old, have become a first line of defence in the battle to keep electricity flowing around Britain during the coronavirus crisis.

Britain’s four “pumped storage” hydro power stations, often referred to as “green batteries”, have played a critical role in helping utility company National Grid address exceptional conditions in the energy system since lockdown.

The closure of businesses pushed demand for electricity down by 20 per cent on average in April and May while unusual weather meant the grid was simultaneously flooded with record solar generation and strong output from wind farms. The combination at times threatened the stability of the system, which has to be balanced on a second-by-second basis.

Developers wanting to build new pumped storage plants are hopeful the recent importance of their role in stabilising the system will bring fresh impetus to a campaign for government support, particularly as UK chancellor Rishi Sunak prepares to plough money into infrastructure projects to kick-start the economy.

“It’s big infrastructure projects that are going to be needed to get the economy stimulated again, big green infrastructure projects,” said Mark Wilson, chief executive of ILI Group, a company based in Hamilton in Scotland that wants to build three new plants of the kind with a total capacity of just under 2 gigawatts.

Pumped storage stations have reservoirs at different heights that can absorb excess electricity by using it to pump water uphill. The water is stored in the upper reservoir and released through turbines to generate electricity when there is stronger demand.

These plants are often a first port of call for National Grid, which is responsible for balancing the electricity system, as they are cheaper than alternative ways of cutting supply — for instance, paying to switch off wind farms.

Pumped hydro plants can also “store” electricity for longer than other technologies such as lithium-ion batteries, although they are not universally popular given their impact on landscapes.

In the UK, several proposed projects of the kind are awaiting planning decisions. Developers hope they can persuade ministers to introduce a support mechanism that they say will provide the confidence to press ahead with construction.

ILI’s first proposed project, on the banks of Loch Ness, is currently subject to a public planning inquiry. If the £620m scheme is approved, Mr Wilson wants the Department for Business, Energy and Industrial Strategy to introduce a “cap-and-floor” mechanism guaranteeing a minimum level of revenue once operational — similar to those used to encourage construction of subsea cables to countries such as Belgium.

FTSE 100 power company SSE is also awaiting a planning decision from the Scottish government for revised plans for Coire Glas, a proposed 1.5GW pumped storage plant in the Highlands. It already has permission for a smaller scheme at the site.

Previous calls for a support mechanism have come to nothing. But developers are hopeful that their case has improved during the recent crisis, which has provided insight into the future challenges of balancing the electricity system as the UK government encourages more renewables to meet its 2050 “net zero” emissions target.

This is because renewables, which produce electricity cheaply once built and are therefore first in the queue to meet demand, have made up a higher proportion of overall generation during the crisis than usual. In May, renewables’ share of generation peaked at a record 67 per cent.

BEIS said it recognised the importance of electricity storage “in helping us achieve net zero emissions”, adding: “We are currently engaging with industry stakeholders to understand further barriers to its deployment on a large scale.”

The Financial Times

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.